Smart Correlation™ Index

Carden Capital’s proprietary Smart Correlation™ Index demonstrates the results of a systematic investment process, designed to be positively correlated with the S&P 500 during prolonged bull markets and negatively correlated with the S&P 500 during deep bear markets. The Smart Correlation™ Index selectively combines investments in the S&P 500, long and short positions in S&P 500 volatility, and cash. Carden Capital utilizes its Smart Correlation™ algorithms to manage its hedge fund and two mutual funds.

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Carden Capital was founded on 12/28/2008. Any returns depicted are hypothetical. The Performance illustrated does not represent the results of actual trading, but was achieved by means of retroactive application of a model designed with the benefit of hindsight, known as back-testing. Back tested returns are based on assumptions and do not reflect actual results of any account. Actual trading results may be materially lower than those illustrated. The strategy returns from live portfolios may differ materially from hypothetical returns. Hypothetical, back-tested performance has many inherent limitations only some of which are described as follows: they are designed with the benefit of hindsight, based on historical data, and do not reflect the impact that certain economic and market factors might have had on the decision or rule-making process. No hypothetical, back-tested or simulated performance can completely account for the impact of financial risk in actual performance. Therefore, it will invariably show positive returns. The information is based, in part, on hypothetical assumptions made for modeling purposes that may not be realized in actual performance. No representation or warranty is made as to the reasonableness of the assumptions made or that all assumptions used in achieving the returns have been stated or fully considered. Assumption changes may have a material impact on the model returns presented. There are frequently material differences between hypothetical, back-tested or simulated performance results and actual results subsequently achieved by any investment strategy. The results do not reflect the friction of trading or any potential loss of liquidity. The back-testing of performance differs from actual performance because the allocation rules may be adjusted at any time, for any reason and can continue to be changed until desired or better performance results are achieved. PAST HYPOTHETICAL PERFORMANCE IS NOT A GUARANTEE OF FUTURE RETURNS. The performance quoted does not include the deduction of management fees. Had management fees been deducted, the performance would have been lower. The highest management fee charged is 2%. Performance would have been reduced by at least this amount. Performance figures are not audited. The financial markets return was not substantially different than the model return illustrated. Past performance does not guarantee future results. Investing involves risk. Stocks and alternative investments are more volatile and carry more risk and return potential than other investments. International investing involves special risks, including fluctuations in exchange rates, currency fluctuations and political and economic uncertainty. Emerging markets risks include illiquidity and volatility. Carden does not guarantee any minimum level of investment performance or the success of any portfolio or investment strategy. The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is a market value weighted index with each stock’s weight in the index proportionate to its market value. Indices are unmanaged and investors cannot invest directly in an index. Indexes do not have management fees. Returns quoted assume the reinvestment of dividends and other earnings. This index is different than the model portfolio in composition, volatility, lack of hedging strategies, and is lower risk. Definitions Added: Sharpe ratio is defined as Average Annual Return / Annualized Standard Deviation

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